Warner Bros, TMZ v. Starline Tours - Complaint PDF

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 1 of 21 Page ID #:1
1 CALDWELL LESLIE & PROCTOR, PC

LINDA M. BURROW, State Bar No. 194668
burrow@caldwell-leslie.com
2
ARWEN R. JOHNSON, State Bar No. 247583
3 johnson@caldwell-leslie.com
JULIA J. BREDRUP, State Bar No. 275526
bredrup@caldwell-leslie.com
4
725 South Figueroa Street, 31st Floor
5 Los Angeles, California 90017-5524
Telephone: (213) 629-9040
6 Facsimile: (213) 629-9022
7 Attorneys for Plaintiffs
EHM PRODUCTIONS INC., dba TMZ,
8 and WARNER BROS.
ENTERTAINMENT INC.
9
10
UNITED STATES DISTRICT COURT
11
CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
12
13 WARNER BROS. ENTERTAINMENT
INC., a Delaware corporation, and
14 EHM PRODUCTIONS INC., dba
TMZ, a California corporation;
15
Plaintiffs,
16
v.
17
STARLINE TOURS OF
18 HOLLYWOOD, INC., a California
corporation,
19
Defendant.
20
Case No. 2:16-CV-02001
21
(4) Trademark Dilution Under the

Lanham Act, 15 U.S.C. 1125(c);
22
23
24
25
COMPLAINT FOR:
(1) Trademark Infringement Under
the Lanham Act, 15 U.S.C. 1114;
(2) Unfair Competition Under the
Lanham Act, 15 U.S.C. 1125(a);
(3) False Designation of Origin, False
or Misleading Description of Fact,
False or Misleading Representation of
Fact, False Advertising and Unfair
Competition under the Lanham Act;
(5) Trademark Infringement Under

Common Law;
(6) False Advertising Under Cal. Bus.
& Prof. Code 17500;
26
(7) Violation of Cal. Bus, & Prof.

Code 17200;
27
(8) Declaratory Relief
28
CALDWELL
LESLIE &
PROCTOR
COMPLAINT
Plaintiffs Warner Bros. Entertainment Inc. (WBEI) and EHM Productions
2 Inc., dba TMZ (TMZ) (collectively, Plaintiffs), bring this action to halt
3 Defendant Starline Tours of Hollywood, Inc. (Starline)s false advertising,
4 unauthorized use of Plaintiffs registered and unregistered trademarks, and unfair
5 competition, and for a judicial declaration that TMZ had a right to terminate its
6 contract with Starline as a result of Starlines material breaches.
7
8
INTRODUCTORY STATEMENT
1.
TMZ and Starline are parties to a written agreement (the TMZ-
9 Starline Agreement) pursuant to which Starline operated TMZ-branded bus tours in

10 the Los Angeles, California area (the TMZ Bus Tour). Among Starlines
11 obligations to TMZ were to remit timely payments of tour revenue to TMZ, to
12 maintain a separate bank account for all TMZ Bus Tour revenue. Starline breached
13 each of these provisions, among others, and TMZ thus properly terminated the
14 Starline Agreement, which, in turn, terminates Starlines right to operate the TMZ
15 Bus Tour and Starlines license to use Plaintiffs marks.
16
2.
Starline, however, continues to use Plaintiffs marks and the goodwill
17 associated therewith, to sell TMZ Bus Tour tickets for periods after the end of the
18 60-day wind-down period in the TMZ-Starline Agreement (a date that TMZ has
19 agreed to extend by 30 days), despite having no right to conduct any TMZ Bus
20 Tours after that date. Plaintiffs thus bring this action to vindicate their rights and
21 protect the TMZ brand and confused consumers from the irreparable harm caused
22 by Starlines unauthorized use of the TMZ marks.
THE PARTIES
23
24
3.
Plaintiff TMZ is a well-known distributor of news related to the
25 entertainment industry and pop culture. TMZ runs multiple websitesTMZ.com,

26 TMZ.sports.com and fishwrapper.comthrough which TMZ investigates and
27 reports on issues relating primarily to entertainment, sports, and business celebrities.
28 TMZ also produces a television show, TMZ on TV, which was launched in 2007 and
CALDWELL
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-1COMPLAINT
1 focuses on the same topics, as well as the television programs TMZ Live and TMZ
2 Sports, and the celebrity-focused game show, South of Wilshire. TMZ maintains a
3 highly visible and active presence on social media. TMZ has more than six million
4 followers on Facebook, more than 3.75 million Twitter followers, and more than
5 two million subscribers to its YouTube channel. TMZ is a corporation organized
6 and existing under the laws of the State of California and has its principal place of
7 business in the County of Los Angeles, California. TMZ is an indirect, partially8 owned subsidiary of and is related to WBEI.
9
4.
Plaintiff WBEI is a corporation organized and existing under the laws
10 of the State of Delaware and has its principal place of business in the County of Los
11 Angeles, California. WBEI is the owner of all trademarks, including registered
12 trademarks, incorporating the TMZ name and/or logo, which TMZ uses as a
13 company related to and under the supervision of WBEI, pursuant to 15 U.S.C.
14 1055 and pursuant to license.
15
5.
On information and belief, Starline is a tour company whose business
16 focuses on transporting passengers on sightseeing bus tours in or around Los

17 Angeles, California. On information and belief, Starline is a corporation organized
18 and existing under the laws of the State of California and has its principal place of
19 business in the County of Los Angeles, California.
JURISDICTION AND VENUE
20
21
6.
This action arises under the laws of the United States, particularly 15
22 U.S.C. 1114, and 15 U.S.C. 1125(a). This Court has jurisdiction over the federal
23 claims under 28 U.S.C. 1331 and 1338(a) and (b). This Court has supplemental
24 jurisdiction over the state law claims under 28 U.S.C. 1367(a), those claims being
25 so related to the federal claims that they form part of the same case or controversy
26 and derive from a common nucleus of operative fact.
27
28
CALDWELL
LESLIE &
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-2COMPLAINT
7.
Venue is proper in this district pursuant to 28 U.S.C. 1391(b) because
2 Starline resides here and because a substantial part of the events or omissions giving
3 rise to the claims herein occurred in the Central District of California.
4
FACTUAL ALLEGATIONS
COMMON TO ALL CAUSES OF ACTION
6 A.
Plaintiffs Are Owners of Distinctive Marks
8.
WBEI is the owner of all rights in and to a series of trademarks and
8 service marks incorporating the TMZ name and logo, both registered and at
9 common law (collectively, the TMZ Marks). WBEI owns a number of federal
10 trademark registrations of marks that incorporate TMZ, including, without
11 limitation:
12
MARK
13
TMZ HOLLYWOOD
14 TOUR SERCREST AND
15 CELEBRITY HOT SPOTS
REG. NO.
GOODS/SERVICES
4059766
Conducting sightseeing tours.
3399620
Entertainment services in the nature

of (a) live-action, comedy, and
drama television series.
3240696

of (a) live-action, comedy, drama
and animated television series;
production of (a) live-action,
comedy, drama and animated
motion picture theatrical films;
production of live-action, comedy,
drama and animated motion picture
theatrical films; theatrical
performances both animated and
live action; internet services
providing information via an
electronic global computer network
16
17 TMZ
18
19
20 TMZ.COM
21
22
23
24
25
26
27
28
CALDWELL
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-3COMPLAINT
MARK
REG. NO.
2
3
4
5
6
7
8
9
10
11
GOODS/SERVICES
in the field of entertainment relating
specifically to music, movies, and
television; providing general
interest news, entertainment, and
educational information via a global
computer network; and providing
information for and actual
entertainment via electronic global
communications network in the
nature of live-action, comedy,
drama and animated programs and
production of live-action comedy,
action and animated motion films
for distribution via a global
computer network.
12
13
9.
WBEI is the owner of the TMZ Marks, and has exclusive control over
14 their use. No third party is permitted to use the TMZ Marks or any other material
15 associated with the TMZ Marks without WBEIs express written consent. TMZ, as
16 the primary user of the TMZ Marks as a company related to WBEI, has the right to
17 enter into and/or revoke any license to use the TMZ Marks, in consultation with
18 WBEI.
19
10.
Plaintiffs have extensively advertised and promoted the TMZ Marks
20 and have invested substantial time, energy, and resources to develop the TMZ
21 Marks. Each of the TMZ Marks is inherently arbitrary, distinctive or suggestive, or
22 has otherwise acquired secondary meaning in the relevant channels of trade to refer
23 to TMZ. As a result of Plaintiffs substantial investments, and the inherent strength
24 of the TMZ Marks, those marks have become famous to the relevant public,
25 including, without limitation, in connection with tour services.
26 B.
TMZ and Starline Begin Operation of the TMZ Bus Tour
27
11.
In or around 2010, TMZ partnered with Starline to create a custom,
28 licensed TMZ-branded bus tour, to be operated by Starline. The TMZ Bus Tour,
CALDWELL
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-4COMPLAINT
1 which was launched in 2011, was to take place in customized buses featuring the
2 TMZ logo and airing video content prepared and owned by TMZ. On information
3 and belief, the strength and popularity of the TMZ brand, and its association with
4 celebrities and pop culture, was a primary draw for consumers purchasing tickets to
5 the TMZ Bus Tour, as opposed to other Hollywood-area bus tours, including but not
6 limited to other tours operated by Starline. On further information and belief,
7 Starline licensed the TMZ Marks from TMZ specifically because of the fame of
8 such marks, and in order to allow its tour service to benefit from Plaintiffs goodwill
9 in the TMZ Marks.
10
12.
The Parties memorialized the terms of their arrangement in the August
11 2012 TMZ-Starline Agreement. A true and correct copy of the TMZ-Starline

12 Agreement is attached hereto as Exhibit A.
13
13.
Pursuant to the TMZ-Starline Agreement, Starlines responsibilities
14 included, among other things, acquiring, building out (subject to TMZs approval)
15 and maintaining the customized buses to be used in the TMZ Bus Tour; maintaining
16 the buses; hiring and managing bus drivers; and marketing, selling tickets and
17 collecting payments for the TMZ Bus Tour. (See TMZ-Starline Agreement, Ex. A,
18 4.) TMZ, on behalf of WBEI, exercised quality control over the customization of
19 the buses. TMZ was responsible for, among other things: hiring and training all
20 tour guides; designing the video content, audio content, tour guide scripts and other
21 materials used on the TMZ Bus Tour; designing the route for each tour bus (subject
22 to Starlines approval); installing the audio/visual equipment to be used on the tour
23 busses; and designing and commissioning the decorative exterior wrap to be used on
24 the outside of the bus. (See id., 5.)
25
14.
Net Revenue from the TMZ Bus Tour (defined as gross revenue from
26 all ticket and charter sales minus specified costs) was to be shared equally between
27 TMZ and Starlinei.e. fifty percent to TMZ and fifty percent to Starline. (See id.,
28 3.)
CALDWELL
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-5COMPLAINT
1 C.
The TMZ-Starline Agreement Provides that TMZ May Terminate the
Agreement for Nonpayment of Revenue and Other Material Breaches
15.
The TMZ-Starline Agreement provides for a detailed a monthly
4 reconciliation process for the parties to determine, and ultimately share, Net
5 Revenues each month. On or before the twenty-fifth (25th) day following the
6 month in which the revenues are earned and costs are incurred, Starline was to
7 provide to TMZ all backup documentation to support its revenue calculations and
8 Starline and TMZ were to provide each other with expense calculations with
9 supporting documentation. TMZ then would prepare and provide to Starline a
10 monthly reconciliation statement, following which Starline had five days to
11 distribute to TMZ any theretofore unreimbursed portion of shared costs incurred by
12 TMZ and TMZs share of the Net Revenue for the reported month. (Id., 3.5.)
13
16.
Pursuant to the express language of the Agreement, Starlines failure to
14 make such payment within the time period designated above constitutes an
15 incurable material breach, giving TMZ the right to immediately terminate the
16 [TMZ-Starline] Agreement for cause, without first providing Starline with notice
17 and an opportunity to cure. (Id., 8.2 (For Cause).)
18
17.
The TMZ-Starline Agreement further requires Starline to deposit all
19 revenues derived from the TMZ Bus Tour immediately upon collection into a
20 business checking account solely dedicated to the TMZ Bus Tour (the Dedicated
21 Account), and to maintain a minimum account balance of $15,000.00 to minimize
22 bank fees and expenses. (Id., 3.2.) Starlines failure to deposit ninety (90) or
23 more percent of revenues into the Dedicated Account in any one month immediately
24 upon the collection thereof also constitutes an incurable material breach under
25 the TMZ-Starline Agreement, also giving TMZ an immediate right to terminate the
26 agreement for cause, without first providing Starline with notice and an opportunity
27 to cure. (Id., 8.2 (For Cause).)
28
CALDWELL
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-6COMPLAINT
18.
In addition, the TMZ-Starline Agreement grants either party a right to
2 terminate the agreement for cause in the event of any other material uncured
3 breach that the other party fails to cure on demand. (Id.)
4
19.
The TMZ-Starline Agreement requires any and all amendments to be in
5 writing, and expressly provides that [t]he fact that any party has not previously
6 insisted upon the other party expressly complying with any provision of [the TMZ7 Starline] Agreement shall not be deemed to be a waiver of the partys future right to
8 require compliance in respect thereof and the parties specifically acknowledge and
9 agree that the prior forbearance in respect of any act, term or conduction shall not
10 prevent either party from subsequently requiring full and complete compliance
11 thereafter. (Id., 19).
12
20.
In the event of termination for any reason, all payments owed by
13 Starline to TMZ immediately become due and Starline is required to return and
14 destroy all intellectual property belonging to [TMZ] as directed. (Id., 8.2
15 (Effect of Termination).)
16
21.
In the event of a termination of the TMZ-Starline Agreement for cause,
17 the non-breaching party is not bound by the non-compete provision contained in the
18 Agreement. (Id., 8.2 (For Cause).)
19
22.
Although the TMZ-Starline Agreement requires the parties to submit
20 disputes to final and binding arbitration, each party is entitled to seek injunctive
21 relief in the state and federal courts of Los Angeles County to prevent or to compel
22 conduct as it relates to operation of the Bus Tour . (Id., 18.1, 18.2).
23 D.
Starline Repeatedly Breached the TMZ-Starline Agreement, Including
24
By Failing to Pay TMZ the Revenue Owed to It
25
23.
Starline was required to make payments to TMZ within five days after
26 receiving a monthly reconciliation statement from TMZ. Starline missed every

27 payment deadline for the past two years, sometimes by more than four months.
28 Although the TMZ-Starline Agreement expressly grants TMZ the right to terminate
CALDWELL
LESLIE &
PROCTOR
-7COMPLAINT
1 the Agreement immediately in the event of late payment, without providing Starline
2 any opportunity to cure, TMZ in fact sent multiple communications to Starline
3 demanding payment. Nevertheless, Starline did not cure its payment breach for
4 November or December 2015 until February 2016, after TMZ had already
5 terminated the Agreement, and, as of this filing, still has not paid Net Revenues for
6 December 2015, which are nearly one month late.
7
24.
Starline also breached the TMZ-Starline Agreement by failing to
8 deposit ninety (90) or more percent of revenues into the Dedicated Account in any
9 one month immediately upon the collection thereof. Indeed, in a meeting at TMZs
10 offices, Starline informed TMZ that it lacked the capacity to segregate the TMZ
11 Bus Tour revenues into the Dedicated Account, and that it was therefore
12 impossible for Starline to timely make payments to TMZ.
13 E.
TMZ Exercises Its Contractual Right to Terminate the Agreement and
14
Demands That TMZ Cease Use of the TMZ Marks
15
25.
On or about February 11, 2016, in response to Starlines repeated
16 breaches of the TMZ-Starline Agreement, including those alleged above, TMZ

17 provided Starline with written notice of termination for cause (the Termination
18 Letter). A true and correct copy of TMZs Termination Letter is attached hereto as
19 Exhibit B. Although the TMZ-Starline Agreement provides for a 60-day wind20 down period in the event of termination for cause, on March 21, 2016, in response to
21 Starlines request to maintain the status quo, TMZ agreed to extend the wind22 down period for 30 days, so that the termination will be complete on May 11, 2016
23 (the Termination Date).
24
26.
In its February 11, 2016 Termination Letter as well as in multiple
25 subsequent communications, TMZ demanded that Starline cease operation of the

26 TMZ Bus Tour after the Termination Date and end its use of any TMZ Marks and
27 other intellectual property belonging to TMZ as of that date. TMZ also has
28 demanded that Starline immediately cease using the TMZ Marks to advertise bus
CALDWELL
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-8COMPLAINT
1 tours taking place after the Termination Date, as Starline has no right to provide any
2 such tours and its use of TMZ Marks in advertising such tours is therefore
3 misleading and damaging to TMZs reputation and brand.
4 F.
TMZ Refuses to Cease Operation of the TMZ Bus Tour and its Use of
the TMZ Marks
27.
Despite TMZs express demands, Starline has refused to agree to cease
7 operations after the Termination Date or to cease using the TMZ Marks in its
8 advertising. As of the date of this filing, Starline is continuing to sell tickets to the
9 TMZ Bus Tour for dates after the Termination Date and is continuing to use the
10 TMZ Marks in advertising the TMZ Bus Tour as taking place after that date.
11
28.
In violation of its contractual obligations, Starline also has failed to
12 immediately remit payment to TMZ for all sums currently due. Although Starline
13 finally paid TMZ the sums due and owing as of October and November 2015 after it
14 received TMZs notice of termination on February 11, 2016, it has yet to pay TMZ
15 the sums due and owing as of December 2015.
16
29.
Despite its multiple breaches of the TMZ-Starline Agreement, each of
17 which give TMZ the right to terminate under the express language of the agreement,
18 Starline has taken the position that TMZs termination is invalid.
19
FIRST CAUSE OF ACTION
20
(Trademark Infringement
21
Under the Lanham Act, 15 U.S.C. 1114)
22
30.
Plaintiffs repeat, re-allege, and incorporate each and every allegation of
23 the foregoing paragraphs, as though fully set forth herein.

24
31.
WBEI owns the registered TMZ Marks, including, without limitation,
25 the following registrations:

26
27
28
CALDWELL
LESLIE &
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-9COMPLAINT
MARK
TMZ HOLLYWOOD
3 TOUR SERCREST AND
4 CELEBRITY HOT SPOTS
REG. NO.
GOODS/SERVICES
4059766
Conducting sightseeing tours.
3399620

of (a) live-action, comedy, and
drama television series.
3240696

of (a) live-action, comedy, drama
and animated television series;
production of (a) live-action,
comedy, drama and animated
motion picture theatrical films;
production of live-action, comedy,
drama and animated motion picture
theatrical films; theatrical
performances both animated and
live action; internet services
providing information via an
electronic global computer network
in the field of entertainment relating
specifically to music, movies, and
television; providing general
interest news, entertainment, and
educational information via a global
computer network; and providing
information for and actual
entertainment via electronic global
communications network in the
nature of live-action, comedy,
drama and animated programs and
production of live-action comedy,
action and animated motion films
for distribution via a global
computer network.
5
6 TMZ
7
8
9 TMZ.COM
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
CALDWELL
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-10COMPLAINT
1 All of the registered TMZ Marks are on the Principal Register maintained by the
2 United States Patent and Trademark Office and remain in good standing. WBEI,
3 including through its related company, TMZ, has the exclusive right to control the
4 use of the registered TMZ Marks by others.
5
32.
The license TMZ granted to Starline to use the TMZ Marks in the
6 TMZ-Starline Agreement is expressly limited to use in connection with the

7 authorized TMZ Bus Tour during the time that the TMZ-Starline Agreement is in
8 effect. Any license to Starline to use the TMZ Marks expires in the event of
9 termination of the agreement and Starline has no right to continue to use the TMZ
10 Marks to advertise services that they have no right to providei.e. bus tours taking
11 place after the Termination Date.
12
33.
Neither WBEI nor TMZ has consented to Starlines use of the TMZ
13 Marks to advertise bus services taking place after the Termination Date and, in fact,
14 explicitly and repeatedly has demanded that Starline cease using the TMZ Marks in
15 this way. Starline thus is aware that it has no right to continue using the TMZ
16 Marks to advertise tours taking place after the Termination Date and any continued
17 use of such marks is therefore intentional, willful, and without regard to WBEIs
18 trademark rights.
19
34.
Despite TMZs repeated demands, Starline has continued to use the
20 TMZ Marks in advertising bus tour services taking place after the Termination Date
21 and has stated that it will continue to use the TMZ Marks in operating unauthorized
22 bus tours after that date.
23
35.
Starlines unauthorized use of the TMZ Marks is likely, if not certain,
24 to deceive or cause confusion or mistake among consumers as to the origin,

25 sponsorship, or approval of the services advertised by Starline and to cause
26 confusion or mistake as to any affiliation, connection, or association between
27 Starline and TMZ after the Termination Date.
28
CALDWELL
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-11COMPLAINT
36.
As a result of Starlines infringement of the TMZ marks, Plaintiffs have
2 lost control over the use of the TMZ Marks and will suffer and are suffering other
3 irreparable harm, the exact nature of which cannot be ascertained at this time and for
4 which there is no adequate remedy at law.
5
37.
Starlines infringement is intentional, willful, and in wanton disregard
6 of Plaintiffs rights.
7
SECOND CAUSE OF ACTION
(Unfair Competition Under the Lanham Act, 15 U.S.C. 1125(a)
38.

11
39.
WBEI owns the TMZ Marks, all of which are distinctive and have
12 acquired secondary meaning. WBEI, including through its related company, TMZ,
13 has the exclusive right to control the use of the registered TMZ Marks by others.
14
40.
The license TMZ granted to Starline to use the TMZ Marks in the
15 TMZ-Starline Agreement is expressly limited to use in connection with the

16 operation of the authorized TMZ Bus Tour during the time that the TMZ-Starline
17 Agreement is in effect. Any license to Starline to use the TMZ Marks expires in the
18 event of termination of the agreement and Starline has no right to continue to use the
19 TMZ Marks to advertise services that they have no right to providei.e. bus tours
20 taking place after the Termination Date.
21
41.
Neither WBEI nor TMZ has consented to Starlines use of the TMZ
22 Marks to advertise bus services taking place after the Termination Date and, in fact,
23 explicitly and repeatedly has demanded that Starline cease using the TMZ Marks in
24 this way. Starline thus is aware that it has no right to continue using the TMZ
25 Marks to advertise tours taking place after the Termination Date and any continued
26 use of such marks is therefore intentional, willful, and without regard to WBEIs
27 trademark rights.
28
CALDWELL
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-12COMPLAINT
42.
Despite TMZs repeated demands, Starline has continued to use the
2 TMZ Marks in advertising bus tour services taking place after the Termination Date
3 and has stated that it will continue to use the TMZ Marks in operating unauthorized
4 bus tours after that date.
5
43.
Starlines unauthorized use of the TMZ Marks is likely, if not certain,
6 to deceive or cause confusion or mistake among consumers as to the origin,

7 sponsorship, or approval of the services advertised by Starline and to cause
8 confusion or mistake as to any affiliation, connection, or association between
9 Starline and TMZ after the Termination Date.
10
44.
As a result of Starlines infringement of the TMZ marks, Plaintiffs have
11 lost control over the use of the TMZ Marks and will suffer and are suffering other
12 irreparable harm from Starlines infringement of the TMZ Marks, the exact nature
13 of which cannot be ascertained at this time and for which there is no adequate
14 remedy at law.
15
45.
Starlines infringement is intentional, willful, and in wanton disregard
16 of Plaintiffs rights.
17
18
THIRD CAUSE OF ACTION

(False Designation of Origin, False or Misleading Description of Fact,
19
False or Misleading Representation of Fact,
20
False Advertising under 15 U.S.C. 1125(a))
21
46.

23
47.
The TMZ Marks have become uniquely associated with and identify
24 WBEI and its related company, TMZ, and its licensed products and services.
25
48.
Starlines use of the TMZ Marks in advertising bus tours taking place
26 after the Termination Date, as well as any use of the TMZ Marks in any bus tours
27 that actually take place after that date, constitutes a false designation of origin, a
28 false or misleading description of fact or misleading representations of fact.
CALDWELL
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49.
Starlines use of the TMZ Marks to advertise bus tours taking place
2 after the Termination Date misrepresents the nature of Starlines services as Starline
3 is not authorized to provide any TMZ-branded tours after the Termination Date.
4
50.
Starlines continued advertising of TMZ-branded tours taking place
5 after the Termination Date using the TMZ Marks will reflect adversely on Plaintiffs,
6 as consumers inevitably will be frustrated and upset when they realize they have
7 booked tours which they, in fact, will not be able to take because Starline is not
8 authorized to operate the TMZ Bus Tour after the Termination Date.
9
51.
In addition, in the event that any TMZ-branded tours continue after the
10 Termination Date, TMZ has no control over the nature and quality of the services
11 offered by Starline after the Termination Date and any failure, neglect or default in
12 providing adequate services will reflect adversely on Plaintiffs.
13
52.
TMZ repeatedly has demanded that Starline cease using the TMZ
14 Marks in advertising tours taking place after the Termination Date. Starline is thus
15 aware that it has no right to continue using the TMZ Marks in this way and that its
16 continued use of the marks notwithstanding this knowledge is intentional, willful,
17 and without regard to TMZs rights.
18
53.
As a result of Starlines unlawful actions, Plaintiffs will suffer and are
19 suffering irreparable harm, the exact nature of which cannot be ascertained at this
20 time and for which there is no adequate remedy at law.
21
FOURTH CAUSE OF ACTION
22
(Dilution under 15 U.S.C. 1125(c))
23
54.

25
55.
As a result of Plaintiffs exclusive and long-term use of and investment
26 in the TMZ Marks, the TMZ Marks have become famous.

27
28
CALDWELL
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-14COMPLAINT
56.
Starlines unlawful use of the TMZ Marks after the Termination Date is
2 likely to impair the distinctiveness of the TMZ Marks and to harm the reputation of
3 the TMZ Marks and of TMZ.
4
57.
As a result of Starlines unlawful actions, Plaintiffs will suffer and are
5 suffering irreparable harm, the exact nature of which cannot be ascertained at this
6 time and for which there is no adequate remedy at law.
7
FIFTH CAUSE OF ACTION
(Trademark Infringement under Common Law)
58.

11
59.
WBEI owns the TMZ Marks, all of which are distinctive and have
12 acquired secondary meaning. WBEI, including through its related company, TMZ,
13 has the exclusive right to control the use of the registered TMZ Marks by others.
14
60.
Starlines unauthorized use of the TMZ Marks in advertising bus tours
15 taking place after the Termination Date, as well as any use of the TMZ Marks in any
16 bus tours that actually take place after that date, constitutes a false designation of
17 origin, a false or misleading description of fact or misleading representations of fact,
18 is likely, if not certain, to cause confusion or mistake among consumers as to the
19 origin, sponsorship, or approval of the services offered by Starline and to cause
20 confusion or mistake as to any affiliation, connection, or association between TMZ
21 and Starline after the Termination Date.
22
61.
TMZ repeatedly has demanded that Starline cease using the TMZ
23 Marks in advertising tours taking place after the Termination Date. Starline is thus
24 aware that it has no right to continue using the TMZ Marks in this way and their
25 continued use of the marks notwithstanding this knowledge is intentional, willful,
26 and without regard to TMZs rights.
27
62.
As a result of Starlines infringement of the TMZ Marks, Plaintiffs
28 have lost control over the TMZ Marks and will suffer and are suffering other
CALDWELL
LESLIE &
PROCTOR
-15COMPLAINT
1 irreparable harm, the exact nature of which cannot be ascertained at this time and for
2 which there is no adequate remedy at law.
3
SIXTH CAUSE OF ACTION
4
5
(False Advertising Under Cal. Bus. & Prof. Code 17500)

63.

7
64.
Starlines unauthorized use of the TMZ Marks in advertising bus tours
8 taking place after the Termination Date, as well as any use of the TMZ Marks in any
9 bus tours that actually take place after that date, constitutes unfair, deceptive, untrue,
10 and misleading advertising.
11
65.
Starline has misled and will continue to mislead the public into
12 believing that Starline is authorized to conduct TMZ-branded tours after the

13 Termination Date and that tours conducted by Starline after the Termination Date
14 are affiliated with, associated with, connected to, or approved by TMZ.
15
66.
Starlines actions are likely to cause confusion, to cause mistake, or to
16 deceive as to Starlines affiliation, connection, or association with TMZ.

17
67.
Starlines continued advertising of TMZ-branded tours taking place
18 after the Termination Date using the TMZ Marks will reflect adversely on Plaintiffs,
19 as consumers inevitably will be frustrated and upset when they realize they have
20 booked tours which they, in fact, will not be able to take because Starline is not
21 authorized to operate the TMZ Bus Tour after the Termination Date.
22
68.
In addition, in the event that any TMZ-branded tours continue after the
23 Termination Date, TMZ has no control over the nature and quality of the services
24 offered by Starline after the Termination Date and any failure, neglect or default in
25 providing adequate services will reflect adversely on Plaintiffs.
26
69.
TMZs untrue and misleading representations were knowingly and
27 intentionally made.
28
CALDWELL
LESLIE &
PROCTOR
-16COMPLAINT
70.
Plaintiffs will suffer and are suffering irreparable harm from Starlines
2 actions, the exact nature and extent of which cannot be ascertained at this time, and
3 for which there is no adequate remedy at law.
4
SEVENTH CAUSE OF ACTION
(Unfair Competition under Cal. Bus. & Prof. Code 17200)
71.

8
72.
Starlines business practices, as alleged above, violate Californias
9 Unfair Competition Law, Business & Professions Code 17200, et. seq.
10
73.
California Business & Professions Code 17200 prohibits any
11 unlawful, unfair, or fraudulent business practice. Starlines business practices are

12 unlawful, unfair, and/or fraudulent, for at least the following reasons:
13
(a)
14
Marks, in violation of the Lanham Act, 15 U.S.C. 1114 and 1125(a),
15
and common law; and
16
(b)
17
to conduct TMZ-branded bus tours after the Termination Date and that
18
any tours conducted after the Termination Date are affiliated with,
19
associated with, connected to, or approved by TMZ, in violation of
20
California Business & Professions Code 17500.
21
74.
Starline has infringed both the registered and unregistered TMZ
Starline has misled the public into believing that it is authorized
Starlines actions have caused, and are likely to cause, consumer
22 confusion, mistake and deception, and to erode TMZs good will. Plaintiffs
23 therefore have suffered injury in fact and have lost money and/or property as a result
24 of Starlines unfair competition.
25
75.
Plaintiffs will suffer and are suffering irreparable harm from Starlines
26 actions, the exact nature and extent of which cannot be ascertained at this time, and
27 for which there is no adequate remedy at law.
28
CALDWELL
LESLIE &
PROCTOR
-17COMPLAINT
76.
Plaintiffs are informed and believe and on that basis allege that
2 Starlines conduct is willful, oppressive, fraudulent, and malicious.

3
EIGHTH CAUSE OF ACTION
(Declaratory Relief)
77.

7
78.
An actual controversy has arisen and now exists between TMZ and
8 Starline with regard to the propriety of TMZs termination of the TMZ-Starline

9 Agreement. Section 8.2, For Cause, of the TMZ-Starline Agreement grants TMZ
10 an immediate right to terminate the Agreement for cause in the event of Starlines
11 failure to either (1) deposit ninety (90) or more percent of the revenues into the
12 Dedicated Account in any one month immediately upon collection thereof; or (2)
13 distribute all undisputed share of revenues owed to TMZ by the date upon which
14 such distribution is due. (TMZ-Starline Agreement, Ex. A., 8.2 (For Cause).)
15 TMZ need not provide Starline an opportunity to cure such breaches. (See id.) In
16 addition, Section 8.2 of the TMZ-Starline Agreement permits TMZ to terminate the
17 agreement for cause in the event of any other material breach that Starline refuses
18 to cure on demand. (Id.) As a result of Starlines breaches of these provisions as
19 alleged above, TMZ provided notice of termination to Starline on or about February
20 11, 2016. Starline, however, has taken the position that TMZs termination is
21 invalid.
22
79.
Plaintiffs desire a judicial declaration that TMZs termination of the
23 TMZ-Starline agreement was proper, that the TMZ-Starline Agreement will be

24 terminated as of the Termination Date, and that Starline has no right to operate the
25 TMZ Bus Tour or use any TMZ Marks after that date. A declaration of rights is
26 necessary and appropriate at this time in order that Plaintiffs may make the plans
27 and commitments necessary for the period following the Termination Date, and
28
CALDWELL
LESLIE &
PROCTOR
-18COMPLAINT
1 because no other adequate remedy exists by which the rights of the parties may be
2 determined.
3
80.
Plaintiffs therefore respectfully request that the Court issue an order
4 declaring that TMZs termination of the TMZ-Starline agreement was proper, that
5 the TMZ-Starline Agreement will be terminated as of the Termination Date, and that
6 Starline has no right to operate the TMZ Bus Tour or use any TMZ Marks after that
7 date.
8
9
10
PRAYER FOR RELIEF

Wherefore, Plaintiffs hereby request that this Court:
A.
Enter a temporary and permanent injunction enjoining Starline and its
11 officers, directors, agents, employees, representatives, and all persons or entities

12 acting in concert or participation with Starline from using the TMZ Marks, or any
13 marks substantially similar thereto, in commerce, including, without limitation, to
14 advertise, market, or operate any bus tours taking place after the Termination Date
15 of May 11, 2016;
16
B.
Enter a temporary and permanent injunction enjoining Starline and its
17 officers, directors, agents, employees, representatives, and all persons or entities

18 acting in concert or participation with Starline from operating, or representing in any
19 manner that they may operate the TMZ Bus Tour after the Termination Date of May
20 11, 2016, or that any Starline bus tour operated after that date shares any connection,
21 affiliation, or association with TMZ;
22
C.
Declare that TMZs termination of the TMZ-Starline agreement was
23 proper, that the TMZ-Starline Agreement will be terminated as of the Termination

24 Date of May 11, 2016, and that Starline has no right to operate the TMZ Bus Tour
25 or use any TMZ Marks after that date.
26 ///
27 ///
28 ///
CALDWELL
LESLIE &
PROCTOR
-19COMPLAINT
D.
Enter an award of attorneys fees and costs; and
E.
Award any such other and further relief as this Court deems just and
3 proper.
4
5 DATED: March 23, 2016
6
7
CALDWELL LESLIE & PROCTOR, PC

LINDA M. BURROW
ARWEN R. JOHNSON
JULIA J. BREDRUP
8
9
10
11
12
By
/s/
LINDA M. BURROW
Attorneys for Plaintiffs WARNER BROS.
ENTERTAINMENT INC. and EHM
PRODUCTIONS INC., dba TMZ
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
CALDWELL
LESLIE &
PROCTOR
-20COMPLAINT

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Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 1 of 21 Page ID #:1

1 CALDWELL LESLIE & PROCTOR, PC

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION

Case No. 2:16-CV-02001

(4) Trademark Dilution Under the

(5) Trademark Infringement Under

(7) Violation of Cal. Bus, & Prof.

(8) Declaratory Relief

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 2 of 21 Page ID #:2

Plaintiffs Warner Bros. Entertainment Inc. (WBEI) and EHM Productions

TMZ and Starline are parties to a written agreement (the TMZ-

9 Starline Agreement) pursuant to which Starline operated TMZ-branded bus tours in

Starline, however, continues to use Plaintiffs marks and the goodwill

Plaintiff TMZ is a well-known distributor of news related to the

25 entertainment industry and pop culture. TMZ runs multiple websitesTMZ.com,

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 3 of 21 Page ID #:3

Plaintiff WBEI is a corporation organized and existing under the laws

On information and belief, Starline is a tour company whose business

16 focuses on transporting passengers on sightseeing bus tours in or around Los

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 4 of 21 Page ID #:4

Venue is proper in this district pursuant to 28 U.S.C. 1391(b) because

COMMON TO ALL CAUSES OF ACTION

Plaintiffs Are Owners of Distinctive Marks

WBEI is the owner of all rights in and to a series of trademarks and

Conducting sightseeing tours.

Entertainment services in the nature

Entertainment services in the nature

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 5 of 21 Page ID #:5

Plaintiffs have extensively advertised and promoted the TMZ Marks

TMZ and Starline Begin Operation of the TMZ Bus Tour

In or around 2010, TMZ partnered with Starline to create a custom,

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 6 of 21 Page ID #:6

The Parties memorialized the terms of their arrangement in the August

11 2012 TMZ-Starline Agreement. A true and correct copy of the TMZ-Starline

Pursuant to the TMZ-Starline Agreement, Starlines responsibilities

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 7 of 21 Page ID #:7

The TMZ-Starline Agreement Provides that TMZ May Terminate the

Agreement for Nonpayment of Revenue and Other Material Breaches

The TMZ-Starline Agreement provides for a detailed a monthly

Pursuant to the express language of the Agreement, Starlines failure to

The TMZ-Starline Agreement further requires Starline to deposit all

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 8 of 21 Page ID #:8

In addition, the TMZ-Starline Agreement grants either party a right to

The TMZ-Starline Agreement requires any and all amendments to be in

In the event of termination for any reason, all payments owed by

In the event of a termination of the TMZ-Starline Agreement for cause,

Although the TMZ-Starline Agreement requires the parties to submit

Starline Repeatedly Breached the TMZ-Starline Agreement, Including

By Failing to Pay TMZ the Revenue Owed to It

26 receiving a monthly reconciliation statement from TMZ. Starline missed every

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 9 of 21 Page ID #:9

Starline also breached the TMZ-Starline Agreement by failing to

TMZ Exercises Its Contractual Right to Terminate the Agreement and

Demands That TMZ Cease Use of the TMZ Marks

On or about February 11, 2016, in response to Starlines repeated

16 breaches of the TMZ-Starline Agreement, including those alleged above, TMZ

In its February 11, 2016 Termination Letter as well as in multiple

25 subsequent communications, TMZ demanded that Starline cease operation of the

Case 2:16-cv-02001-SJO-GJS Document 1 Filed 03/23/16 Page 10 of 21 Page ID #:10

the TMZ Marks

Despite TMZs express demands, Starline has refused to agree to cease